European Natural Gas Market Faces High Volatility

According to a recent report by Fitch Ratings, the European natural gas market is expected to experience high and volatile prices in 2025. This forecast is attributed to a tight market, influenced by several key factors including severe cold weather conditions, a global uptick in demand for liquefied natural gas (LNG), and the cessation of Russian gas imports through Ukraine.

Medium-term Market Pressures and Future Demand

Fitch also highlighted potential medium-term downward pressures on prices, primarily due to the significant renewable energy capacity set to be introduced in the near future. However, this could be counterbalanced by an increase in demand from emerging sectors such as data centers, electric vehicles, and heat pumps starting from 2026.

Price Predictions and Geopolitical Risks

The agency anticipates gas prices to range between €60 and €90 per MWh in 2025, with a possibility of higher prices if geopolitical risks exacerbate gas price volatility further.